It’s sales tax holiday time, again, in Virginia. Yes, it’s a special time of year when the state generously lifts its sales tax on certain items, in this case, school supplies, to encourage consumers to get out there and spend.
I’ve written more times than I care to recall about how such holidays are poor policy. But this item in the Fredericksburg paper so neatly captures the muddled thinking behind the holidays, it demands a response. The nut graph runs like this:
The idea of a sales-tax holiday for back-to-school shopping began in New York 15 years ago. And what a boon it is for parents! The days of sending kids back to school with a new lunchbox and a couple of sharpened pencils are long gone. Today’s parents shop from lists that include everything from folders, packs of notebook paper, and boxes of crayons, pens, and pencils to hand sanitizer and tissues. The average consumer spends over $600 outfitting their kids for school, according to the National Retail Federation’s Back-to-School survey. That’s daunting for many families. So 13 states, including Virginia, now help by relaxing retail sales tax rules for a few days.
Unpacking the inanities in this paragraph is difficult. But I’ll focus on the rare use of an exclamation mark in the piece.
Is the back-to-school sales tax holiday a genuine “boon” for parents? Hardly. What the sales tax holiday implies is that the list of supplies required and suggested for returning students has gotten out of hand. I’ve seen the list from my son’s school. It borders on the ridiculous, and includes a list not only of personal supplies, but “shared use” items (all-purpose cleaner? Really?).
But sales tax holidays are also an admission that the state’s overall sales tax is out of whack. As the Tax Foundation has long noted, and does so again here :
Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief. If a state must offer a “holiday” from its tax system, it is a sign that the state’s tax system is uncompetitive. If policymakers want to save money for consumers, then they should cut the sales tax rate year-round.
Exactly. But don’t look for the resident political class to provide such year-round relief any time soon. Providing tax relief to everyone, every day, on every item they purchase, offers only one unique opportunity to issue a self-congratulatory press release. Virginia pols, with three, regularly-scheduled tax holidays, have created the political gift that keeps on giving.
